Hi!
�I don't follow the explanation of blocks. For me, the next data value after the byte pair 00 7F is 01 00.
Indeed, but here we are talking about sending a stream of bytes (e.g. MIDI file) through the File Dump - not pairs! Bytes themselves don't have the 7F limitation - in fact, in the MIDI file you can find the bytes with the highest bit set (Variable Length Values - check the bottom of this page: http://www.ccarh.org/courses/253/handout/smf/). Also, File Dump is not only used to send MIDI files, but also samples, which are binary data not limited by MIDI standard in any way, thus they can be full of FFs.
So, to overcome the SysEx limitation, one have to get rid of the highest bits - in case they were set. Bytes are grouped by seven, and the highest bits of every byte are grouped to form the eight byte. That way we can guarantee that no byte will ever be bigger than 7F.